Singapore Airlines 2015 Annual Report Download - page 108

Notes to the Financial Statements
31 March 2015
2 Summary of Significant Accounting Policies (continued)
(d) Basis of consolidation
The consolidated financial statements comprise the separate financial statements of the Company and its subsidiary
companies as at the end of the reporting period. The financial statements of the subsidiary companies used in the
preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent
accounting policies are applied to like transactions and events in similar circumstances. A list of the Group’s subsidiary
companies is shown in Note 23 to the financial statements.
All intra-group balances, transactions, income and expenses and unrealised profits and losses resulting from intra-group
transactions are eliminated in full.
Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services
are received.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the
acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be
recognised in accordance with FRS 39 either in the profit and loss account or as change to other comprehensive income.
If the contingent consideration is classified as equity, it is not remeasured until it is finally settled within equity.
In business combinations achieved in stages, previously held equity interest in the acquiree are remeasured to fair value
at the acquisition date and any corresponding gain or loss is recognised in the profit and loss account.
The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is
recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s
identifiable net assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-
controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree
(if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. The accounting
policy for goodwill is set out in Note 2(f). In instances where the latter amount exceeds the former, the excess is recognised
as gain on bargain purchase in the profit and loss account on the acquisition date.
Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiary companies not attributable, directly or indirectly, to owners
of the Parent, and are presented separately in the consolidated statement of comprehensive income and within equity in
the consolidated statement of financial position, separately from equity attributable to owners of the Parent.
Changes in the Company’s ownership interest in a subsidiary company that do not result in a loss of control are accounted
for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are
adjusted to reflect the changes in their relative interests in the subsidiary company. Any dierence between the amount
by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised
directly in equity and attributed to owners of the Parent.
106 FINANCIAL